March 5 (Bloomberg) -- Televisions, club memberships and
boats are accounting for a smaller share of U.S. consumer
spending since the recession.

Americans spent about $782.5 billion for recreational
goods, vehicles and services -- including sporting equipment and
amusement parks -- in January on a seasonally-adjusted
annualized basis, representing 6.9 percent of total personal
consumption, based on data from the Commerce Department. The
share nearly matches the average since the 18-month slump ended
in June 2009. In the three years before the recession, the
average was 7.4 percent.

Consumers are suffering from the “overhang of a frugality
psyche” that’s making them either unwilling or financially
unable to allocate the same amount of their budgets to these
goods and services, said Stuart Hoffman, chief economist at PNC
Financial Services Group Inc. in Pittsburgh. The result is a
“lasting legacy of the severity of the recession.”

Higher gasoline prices and payroll-tax increases this year
have led to a “broad-based” slowdown at fitness clubs owned
and operated by Town Sports International Holdings Inc., Chief
Executive Officer Robert Giardina said on a Feb. 19 conference
call. Cancellations increased, and personal training and
membership sales started to fall in the second half of January
for the New York-based company as consumers became “much more
cautious again,” he said.

‘Not in Fashion’

Amid rising costs for basic necessities, “consumers still
are budgeting for recreational activities as though there’s been
no improvement in the economy,” Hoffman said. With many
Americans buying “what they need versus what they want,” it’s
“not in fashion” to use credit cards for leisure purchases.

This sentiment is echoed in surveys conducted by America’s
Research Group, a consumer-behavior research and consulting
company. Parents are “fearful” about going back into debt to
pay for discretionary items because they’re more focused on how
to help their children finance college expenses, said Britt
Beemer, chairman of the Charleston, South Carolina-based group.

“When we ask parents what they do when the budget gets
tight, they say they go to fewer movies and restaurants, then
cut down on their cable bill or computer services,” Beemer
said. Refinancing their homes or taking out a second mortgage as
a “piggy bank” to keep up a particular lifestyle is no longer
an option for many homeowners, he said.

‘Shunning Debt’

“There’s been a sea change in the mentality of
consumers,” Beemer said. Americans are “shunning debt” as
other priorities are “overshadowing all spending on everything
nonessential.”

U.S. paychecks have shrunk this year after Congress and
President Barack Obama let the tax that funds Social Security
benefits revert to 6.2 percent from 4.2 percent. Rising costs
for gasoline and health care also have “wiped out” a lot of
spending money, Beemer said, adding that some workers are paying
about $45 to $85 more a month to fund their employer insurance
plans.

Health care expenditures -- including outpatient services
and hospitals -- accounted for 16.4 percent of total personal
consumption in January, up 2 percentage points from the 10-year
prerecession average, Commerce Department data show. Meanwhile,
the average price of a gallon of regular unleaded has risen
about 16 percent to $3.75 from a low of $3.22 on Dec. 19,
according to Heathrow, Florida-based AAA, the largest U.S.
motoring organization.

Energy Expenses

Consumers are “really feeling the pinch” as the cost of
filling up their tanks and other energy expenses “detracts from
their ability to spend on a new bike or other leisure items,”
said Lance Roberts, who oversees $500 million as chief executive
officer of Streettalk Advisors LLC in Houston.

Retail sales rose 0.3 percent last month, based on the
median estimate of economists surveyed by Bloomberg, following
monthly gains in November through January. February figures are
scheduled to be released on March 13.

American consumers also have been “forced to live
frugally” because they haven’t seen a big boost in hourly
earnings adjusted for inflation, Roberts said. The average for
all U.S. private-sector employees rose 0.6 percent in January
from a year ago, Labor Department figures show.

Even so, the share consumers are allocating to recreational
spending has stabilized since the recession, as their
“inability to splurge has been pretty steady for the past three
years,” Hoffman said.

There also are winners and losers in the discretionary-spending category, as some companies have managed to sustain
solid sales, Roberts added.

‘Solid Sales’

Brunswick Corp. is forecasting revenue growth of 3 percent
to 5 percent this year, following a 1 percent increase in 2012,
according to a Jan. 24 statement from the Lake Forest, Illinois-based company. Sales in its U.S. boat business rose 13 percent
in the three months ended Dec. 31, 2012, driven by dealers
“increasing their pipeline levels in response to strong retail
demand trend,” Chairman and Chief Executive Officer Dustan
McCoy said on a conference call that day.

Still, based on consumer-spending habits during the holiday
season -- when many shoppers in Beemer’s surveys reported
cutting back on gift-giving -- big-ticket purchases of some
discretionary items probably are on hold, he said. “Needs have
overtaken the wants in America.”